The Limits of Laziness
When it comes to managing my money, I will almost always opt to do less. Direct deposit and auto-payment? Of course. Target date index funds? Sign me up! If there is an opportunity to simplify my finances, I am here for it.
On the other hand, my other money mantra is mindfulness. So how do these two approaches – laziness and mindfulness – play together? There are at least two common situations where I abandon my indolence, buckle down, and do the work:
- Monitoring my credit report. There are several companies that sell “credit monitoring” services, alerting you when someone attempts to open a line of credit or take a loan in your name. It is, in my view, a complete waste of money. (Not just my opinion either; check out this recent post from the National Consumer Law Center.) You can get your credit report, completely free, from each of the three major credit reporting agencies (Equifax, Experian, TransUnion) at annualcreditreport.com. Reviewing your report from time to time will alert you to anyone using your identity.
Further, absolutely everyone should freeze their credit reports, which blocks any potential lender from accessing your credit report. (You can easily temporarily thaw your credit report for those moments when you are actually applying for a loan.) Unlike in the past, freezing and unfreezing your credit report is easy, fast, and free. (You will need to visit each of the credit reporting agency websites individually to place a credit report freeze.)
But worse than being a needless expense, relying on a credit monitoring company and not regularly reviewing your report yourself, leaves you in danger of not understanding how the American system of credit reporting (and its well-known derivative, credit scoring) works. And not only do credit monitoring services offer no real additive value, they can potentially leave you worse off if you do need to file a claim for damages.
- Combing my bills for unused subscriptions. If the most popular merchant selling this service is to be believed, they save their average customer $180 per year by scanning their monthly account statements for unwanted subscriptions and identifying opportunities to lower recurring charges. Even more than credit monitoring companies (who offer an arguably useful, although completely superfluous service), I dislike this business model because it applauds you for being completely uninformed about how you spend your money. How disengaged from your financial life must you be to pay month after month for zombie subscriptions?
These two tasks are “Money Mindfulness 101.” It’s not the cost of these services that rankles me – who among us has not paid someone to perform a task that we could have done perfectly well ourselves? My objection is that being lazy about the day-to-day of money management is not a license for abdicating responsibility for your finances. People, you still need to pay attention!